U.S. Dollar Higher On China Concerns, Moody's Downgrades

(RTTNews) - The U.S. dollar advanced against its major opponents in the European session on Tuesday, as weaker-than-expected trade data from China and Moody's downgrade of the credit ratings of several small and midsized banks dampened risk sentiment.

China's imports and exports fell much faster than expected in July, threatening growth prospects in the world's second-largest economy and heightening pressure for the government to provide fresh stimulus to prop up demand.

Moody's cut the credit ratings of 10 banks by one notch and warned of downgrading major lenders including U.S. Bancorp, Bank of New York Mellon Corp., State Street Corp., and Truist Financial Corp.

Data from the Commerce Department showed that the U.S. trade deficit narrowed in June.

The trade deficit shrank to $65.5 billion in June from a revised $68.3 billion in May. Economists had expected the trade deficit to decrease to $65.0 billion from the $69.0 billion originally reported for the previous month.

The greenback climbed to 1.0929 against the euro and 1.2684 against the pound, setting 5-day highs. The currency may challenge resistance around 1.07 against the euro and 1.24 against the pound.

The greenback appreciated to 1.3501 against the loonie, its highest level since June 2. If the currency rises further, 1.37 is likely seen as its next upside target level.

The greenback was up against the franc, at a 4-day high of 0.8779. On the upside, 0.91 is seen as its next resistance level.

The greenback advanced to more than a 2-month high of 0.6496 against the aussie and a 2-month high of 0.6035 against the kiwi, off its early lows of 0.6576 and 0.6109, respectively. The currency is seen facing resistance around 0.62 against the aussie and 0.58 against the kiwi.

The greenback eased against the yen, after rising to a 5-day high of 143.43 in the Asian session. The pair had closed yesterday's deals at 142.48.